House prices in Australia are world’s highest

According to a study released by the Organisation for Economic Co-operation and Development (OECD), Australia has the highest prices relative to rental levels, the third-highest prices relative to incomes, and the fourth-highest levels of household debt relative to incomes (Source: The Age). No wonder people are finding it tough to buy at the moment, especially first home buyers. However, because the property boom lasted for so long, the OECD say there could be a dramatic decrease in house prices to balance things out. That’s great news for people struggling to buy into the property market, but the bad news is that a correction of these inflated house prices could generate an economic downturn, affecting growth, employment, government budgets and bank lending.